Bob Chapman Deepening Financial Crisis 15 10 09

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Bob Chapman Deepening Financial Crisis 15 10 09

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Global Research, October 15, 2009

The International Forecaster - 2009-10-14

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Our view is that the elitists are currently buying time for the dollar, andstalling the rally in precious metals, by weakening other currencies untilthey are ready for the big stock takedown/correction. This process of supporting the dollar is becoming extremely expensive and difficult, sothey had to take the Dow down 200 points on Thursday to start somestock contagion in Asia and Europe to flush some money into dollars andtreasuries.The FTSE, Nikkei and Hang Seng were all down big in the aftermath of Thursday's US market takedown. We believe that the Illuminati willprobably try to punish all the stock shorts in mid October on optionsexpiration day by having one final round of short-covering before takingthe markets down for the big correction to start a dollar rally just as theprecious metals seasonal rally goes into full swing. This yellow fevercrash is just a repeat of last year's strategy, but it will not be as severe forpurely political reasons. In this manner, they will flush everyone else out

of their short positions so that only they can make any money when theboom gets lowered and there will be many put options that expireworthless in yet another round of total criminality reminiscent of whatthey just did to the gold and silver call options this month. They willmake money on the big rise from short-covering, and then will reversecourse to profit from the big takedown, all through the unregulated dark pools of liquidity so no one can see what is happening. This will be theirlast hurrah when it comes to suppressing precious metals, and gold andsilver will come roaring back as any and all confidence is lost in the stock

markets and the economy, and as the elitists are forced to start drivingthe markets back up again to avoid revolution. The dollar rally willquickly fizzle, and the elitists will start ratcheting the dollar back down

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again, this time toward the 71 area on the USDX, and who knows wherefrom there.

The Illuminists, who own the Federal Reserve, are terrified that the Fedwill be audited by the passage of HR1207 and SB604. They are now

contemplating naming their borrowers. Our guess is guidelines andprovision will be established for disclosure, but only to the TreasuryDepartment.

Currently monetary-policy-operations regarding loans to banks andinterest rate decisions are hidden from the General Accounting Office bylaw. The Fed, of course, doesn’t want you to see what they are up too.HR1207 would change that.

The opportunity to present a case for audit and investigation was created

by the arrogance of the Fed when it refused to identify the recipients of trillions of dollars in emerging loans, and what was being accepted ascollateral and what was its real value. In addition, the Fed loaned fundsthat didn’t require congressional approval and many wanted to see theextent and details of such lending. In this particular case BloombergNews, which got a court order to do so was told by the Fed that it was astate secret. The Fed simply defied the court order and nothing has beendone to force them to comply. We know $700 billion was lent through theTARP program and $500 billion in the currency swap program, but what

about the rest of the loans? We have no idea where the money went orwhat if anything was pledged in return.

The bottom line is our government and the American people have a needto know who gets loans, what the collateral is, what secret deals the Fedhave with other central banks, what secret accounts they have offshore,what are their swap agreements, how much money they have createdsecretly that Congress knows nothing about and what inside informationis the Fed passing along to their friends in banking and Wall Street.

Treasury Secretary Geithner, under the FOIA release, made 80 contactssince taking his job, with Goldman Sacks, JP Morgan Chase, Citigroupand BlackRock. Some were by phone and some in person. Most callswere between Geithner and Goldman CEO Lloyd Blankenfeld. Can therebe any doubt in your mind who controls our government?

These actions are what we must be privy too. These are the kind of thingsthat has sent the Fed into tantrums. Why is the Fed so secretive and whymust they rely on public ignorance? No wonder 75% of those polled wantan audit and an investigation. What astounds us is that so many people

have come to understand that what the Fed does should not be secret. Asan extension of that, if the people are successful, it will be a great victoryfor the populace. If this leads to the disbanding of the Fed, and its work’s



taken over by our Treasury, we may be able to get our country back fromthe Illuminists. If we can bring about the end of the Fed, a monopoly,that has been looting and strangling our country and the seat of Illuminist power will be ended. Let’s all work together on this and make

it happen. Contact every Senator and Representative and in a few lineslet him or her know that you want the fed audited.

Turning now to our government we find that its deficit now exceeds 40%of expenditures; or 40% or more is borrowed and not serviced byrevenues. Historically this is the point at which hyperinflation begins.This situation is going to get progressively worse because there is notgoing to be a recovery and unemployment will worsen. The deficit isprojected to increase by $1 trillion a year for the next nine yearsminimum. Even if 3% growth could be mustered in five years the

national debt could reach $18 trillion, which is short-term debt, whichwould be 100% of GDP.

That means funds would have to come from more taxes, increasedsavings or the Fed monetizes the debt. That means a falling dollar andhyperinflation. The Fed thus far has been able to get away with majormonetization due to the major deflationary undertow. This de-leveragingprocess will go on for many years to come. That brings up the questionhow much money and credit has the Fed created and who has been given

that money? A good part of it has gone to banks that are not lending itout.

Government cannot continue to do what it is doing, nor can the Fedcontinue to print money endlessly. This is certainly a formula that cannotcontinue.

We do not really know how much government debt the Fed has bought,because they won’t tell us. It is a state secret. Even if the Fed wanted toemulate what Paul Volker did in the early eighties they couldn’t. Thatshould have been done long ago in 2001 and 2002. That was when thepoint of return was past. Now there is no way back.There is no hope of a deficit reduction and once the Fed has lostmomentum bond yields in the real market are going to rise.

In May inflation began to rise again. It will be far more noticeable nextyear.

Wall Street and investors do not seem to understand that the budget andthe budget deficit is too difficult to carry. If taxes are raised as they werein 1937, it will cut off any possible recovery and collect less taxes overall.

Such a move could also boost non-filers up over 40%. We are about tofind out you cannot print or borrow your way into prosperity.



The cuts have to come from the federal government. This is far betterthan raising taxes, especially when federal workers make almost twice asmuch as workers in the private sector. There are many solutionsavailable, but our Congress is unwilling to use them for political reasons.

The longer the solutions are avoided the worse the problem is going to be.Banks, Wall Street and government choose to avoid the consequences of deep structural maladjustments that they were responsible for creating.They are trying to perpetuate a bubble rather than fix the problem. Is itany wonder the dollar continues to fall. Unprecedented stimulus, withmore probably on the way, has not stabilized the economy. It hasn’t evenstopped rising unemployment. The velocity of unemployment hasdeclined, but the numbers are still rising. Every move by Wall Street,government and banking is for short-term performance and it is not

working.What is needed is long-range planning, but, of course, that never enteredtheir minds. Stocks may be up but the economy isn’t. The debasementcontinues and the dollar is taking the flack, because inflation cannot beavoided. The Illuminists suppressed gold and silver for years hopinginvestors and the public wouldn’t realize what was being done to thedollar. That doesn’t work anymore, because the government is out of gold and if they are not out they are close to it. Granted the dollar isn’t

the only weak currency. For six years every world currency has fallenversus gold, but no one wants to talk about that. The dollar gets all theheat because gold is traded in dollars and it is the world’s reservecurrency as well. Switching from one currency to another isn’t going towork. It is not the answer, only gold is.

The lending bubble has been broken. Next is the bear market rally stock bubble. Deflation is snapping at our heels, as credit is no longer easilyavailable. Bank lending is off 14% yoy. The game of de-leveraging is overexcept for banks and they are basically all already in dollars. That leaves

even less flexibility for lenders. That means the Fed’s monetary policyhas to be ever more expansive to be effective. In turn, this along with zerointerest rates, these elements drive the dollar lower and gold higher.

In the latest sign of weakness in Louisville-area employment, about10,000 people applied over three days for 90 jobs building washingmachines at General Electric for about $27,000 per year and heftybenefits.

The jobs dangle medical, eye care, prescription and dental benefit

packages, as well as pension, disability, tuition assistance and more, saidGE spokeswoman Kim Freeman. And despite the recession, no union



workers have been laid off from Appliance Park since the companynegotiated lower wages with workers in 2005.

“There are no jobs out there paying these kinds of wages that also offerthese kind of benefits,” said Jerry Carney, president of IUE-CWA Local

761 at Appliance Park.Just four years ago, the same jobs paid $19 per hour. But that was beforeLocal 761 approved wage cuts for new workers aimed at preventing theclosure of Appliance Park.

The average price of regular gasoline at U.S. filling stations slipped to$2.48 a gallon as inventories of gasoline and distillate fuel increased.

Gasoline lost 4.5 cents in the two weeks ended Oct. 9, according to asurvey of 5,000 filling stations nationwide by Trilby Lundberg, an

independent gasoline analyst in Camarillo, California.Central banksflush with record reserves are increasingly snubbing dollars in favor of euros and yen, further pressuring the greenback after its biggest two-quarter rout in almost two decades.

Policy makers boosted foreign currency holdings by $413 billion lastquarter, the most since at least 2003, to $7.3 trillion, according to datacompiled by Bloomberg. Nations that report currency breakdowns put63 percent of the new cash into euros and yen in April, May, and June,Barclays Capital data show. That’s the highest percentage in any quarterwith more than an $80 billion increase.

World leaders are acting on threats to dump the dollar, while the Obamaadministration shows a willingness to tolerate a weaker currency in aneffort to boost exports and the US economy, as long as it doesn’t driveaway creditors. The diversification signals the currency won’t reboundanytime soon, after losing 10.3 percent on a trade-weighted basis the pastsix months, the biggest drop since 1991.

“Global central banks are getting more serious about diversification,

whereas in the past they used to just talk about it,’’ said StevenEnglander, chief US currency strategist at Barclays. “It looks like theyare really backing away from the dollar.’’

Large banks should be banned from trading derivatives including creditdefault swaps, said Joseph Stiglitz, the Nobel prize-winning economist.

The CDS positions held by the five largest banks posed “significant risk”to the financial system, Stiglitz said at a press conference in Brussels. Bigbanks should have extra restrictions placed on them, including a ban on

derivative trading, because of the risk that they would need governmentmoney if they fail, he said in a speech today.



“We will have another armed robbery unless we prevent the banks, thebanks that are too big to fail,” Stiglitz said. “We should say that if you’retoo big to fail then you are too big to be. They need more restrictions,such as no derivative trading.”

Derivative trading and excessive risk-taking are blamed for helping tospark the worst financial crisis since World War II. AmericanInternational Group Inc., once the world’s largest insurer, needed about$180 billion of government money after its derivative trades faltered andpushed the company toward bankruptcy.

Financial markets should be subject to taxes that will discourage“dysfunctional” trading and help pay for the effects that the global crisishad on poorer nations, Stiglitz said last week.

U.S. and European regulators have pushed for tighter regulation of the$592 trillion over-the-counter derivatives market, amid concerns that itcould create systemic failures in the financial system. Lawmakers havecalled for global rules covering derivatives to prevent financialinstitutions from exploiting jurisdictional differences in regulation.

Egyptian newspaper al-Mesryoon says former Israeli media tycoon hassubmitted another offer to purchase television network from Qatari emirthrough Egyptian mediator News agencies.

Former Israeli billionaire Haim Saban is holding negotiations for thepurchase of 50% of the al-Jazeera television network from the Qatarigovernment, Egyptian newspaper al-Mesryoon reported Wednesday. Thenegotiations are said to be conducted through an Egyptian mediator.

According to the report, the television network is experiencing financialtrouble despite its immense popularity. This is the second time Saban isnegotiating with the Qatari emir.

The media tycoon visited Qatar in 2003 together with former USPresident Bill Clinton, as part of a conference aimed at promoting peace

in the Middle East.Saban backed out of the same negotiations in the pastwithout offering any explanation. His new offer was submitted recentlythrough an Egyptian businessman.

In addition to the Saban Group's media activity, and its stakes in Israelicommunications company Bezeq, Saban used to be a musician and has adual Istraeli-American citizenship. He was born in Alexandria, Egypt in1944, and immigrated to Israel in 1956.

HOW BADLY DID the U.S. housing market crash? Well, just look at

how much federal aid it has taken to stabilize it, at least for now. TheFederal Reserve has bought almost $700 billion worth of mortgage-backed securities, with more to come. The Treasury Department is



covering the losses of Fannie Mae and Freddie Mac. Congress hasenacted tax credits to spur home buying, including an $8,000 bonus tofirst-time buyers that expires Nov. 30 but may well be extended. TheFederal Housing Administration has dramatically expanded its mortgage

insurance portfolio. The Obama administration offers government-backed refinancing to middle-income homeowners who are up to 25percent underwater in their current mortgages.

Yet housing remains burdened by a huge backlog of unsold homes, whichwill probably grow since more foreclosures are on the way. And so theTreasury Department is contemplating yet more help, this time in theform of backstopping state-issued mortgage-revenue bonds, which arefederally subsidized in that investors collect the interest tax free. Duringthe boom, the states' housing finance agencies used these bonds to fund

about 100,000 low-interest mortgages per year for lower-income homebuyers. But since the bust, private bond buyers have shunned them,notwithstanding their tax-free status. At $4 billion this year, mortgage-revenue bond sales are running at a quarter of the pace they set in 2007,according to Thomson Reuters. The plan under discussion would havethe government purchase about $20 billion worth of new bonds beforethe end of the year while insuring $15 billion in existing securities thatstates otherwise might be forced to redeem because they would not betradable in the markets.

Administration officials are considering steps to limit the risk totaxpayers by, for example, charging a fee to back those bonds thatTreasury does not buy outright. It is also true that, in the past, borrowersof bond-backed mortgages, well selected by the states, have defaultedrelatively rarely. Of course, past borrowers didn't face anything liketoday's unemployment and foreclosure rates. Indeed, those conditionspartly explain why private investors have bowed out of the market. Ascompared to other more direct forms of housing aid, mortgage-revenue

bonds also come with high associated costs, in the form of fees forlawyers, rating agencies and underwriters.

Compared to the overall size of the huge housing bailout, this latestpolicy idea is pretty small beer. It does illustrate, though, thatWashington is still in crisis mode when it comes to thinking about a vast,strategic sector of the economy. That's perhaps understandable, but itcan't go on indefinitely. The financial crisis was partly the result of yearsof government-encouraged over-investment in residential real estate.When will the federal government start working on an exit strategy and

a new, more rational housing policy -- one in which individualhomeownership occupies a central, but less heavily subsidized, position?The answer, apparently, is not yet.



A $2.1 billion drop in California tax collection is opening a hole inGovernor Arnold Schwarzenegger’s budget only three months afterlawmakers in the most-populous state slashed spending for the secondtime in a year.

General fund revenue in the state accounting for 13 percent of the U.S.gross domestic product dropped to $19.4 billion during the fiscal year’sfirst three months, according to figures Democratic Controller JohnChiang released Oct. 9. The total for the period ended Sept. 30 trailed by$1.1 billion, or 5.3 percent, forecasts in the annual budget the Republicangovernor signed July 28.

“This reinforces that state’s budget problems aren’t over, and as the yeargoes on, we’re likely to see growing budget deficit projections,” said

David Blair, an analyst with Pacific Investment Management Co. inNewport Beach, California, which invests $20 billion in municipal bonds.“This clearly is going to continue to put pressure on the Legislature andthe governor.”

The latest report underscores how states including California, the largestmunicipal bond issuer in the U.S., are still dealing with fallout from therecession even as the economy begins its recovery. The state last week was forced to raise yields to attract buyers to a $4.1 billion debt sale,after cutting the issue from $4.5 billion.

California’s decision helped push up borrowing costs in the municipalmarket by the most in almost four months even as states prepare newissues of taxable Build America Bonds, whose sales already total $40.2billion. The Treasury pays 35 percent of interest costs for the debt, partof the federal economic stimulus plan approved in February.

The US government doesn't have to reveal information about phonecompanies that may have spied illegally on Americans because thosephone companies are an "arm of the government," the US Justice

Department argued in a recent court case.The Senate Judiciary Committee narrowly passed a bill Thursday toextend several controversial provisions of the USA Patriot Act, thecounterterrorism law hastily drafted in the aftermath of 9/11.

The parts of the Patriot Act set to expire December 31 that the panelvoted to extend until 2013 included roving wiretaps, which authorizes theFBI to target individuals using multiple phone numbers; the "lone wolf"provision, which targets individuals who are not connected to terroristgroups and has thus far never been used; and, perhaps the most

controversial, section 215 orders , otherwise known as the "library



records" provision, which allows the FBI to access individuals' personalrecords via National Security Letters (NSLs).

There may not be as much slack in the U.S. economy as many forecastersbelieve, which means medium-term inflation risks could be higher, a

Federal Reserve official said on Sunday. St. Louis Federal ReservePresident James Bullard said it was hard to accurately measure the gapbetween what the economy is producing and its full potential.

"I am concerned about a popular narrative in use today -- the narrativebeing that the output gap must be large since the recession is so severe,"he said. "And so, any medium-term inflation threat is negligible, even inthe face of extraordinarily accommodative monetary policy. I think thisnarrative overplays the output gap story."

Fissures are developing among policy makers at the Federal Reserve asthey debate how and when to start raising the benchmark interest ratefrom its current level just above zero.

One hint of the discord came Tuesday, in a speech by Thomas M. Hoenig,president of the Federal Reserve Bank of Kansas City.

Though he stopped short of calling for immediate rate increases, Mr.Hoenig made it clear that he was getting impatient. “My experience tellsme that we will need to remove our very accommodative policy soonerrather than later,” he told an audience of business executives. “Even if wewere to start immediately, much time would pass before incrementalincreases could be considered tight or even neutral policy.”

William C. Dudley, president of the New York Fed, presented a detailedcase that seemed aimed at responding to those calling for a quick end tolow rates. “Some observers are concerned that this expansion willultimately prove to be inflationary,” he told an audience at the CorporateLaw Center at Fordham University. “This concern is not well founded.”

Dudley, the ex-Goldie economist, and others from the money centers

want to keep supply juice to the financial engineers and speculators. Theheartland Fed presidents want to reign in the juice and the specs. [TheNYC banks control the Fed, thus rates will remain low for at least ayear.]

Many American economists say the greenback is falling because theglobal economy is recovering – so investors no longer need the dollar as a"safe haven". That's nonsense. The reality is that "safe haven" status hasshifted away from the dollar and towards tangible assets that the US

government can't debauch by printing more of them. That's why gold just hit a fresh all-time high of well over $1,000 per ounce. That's whycommodity-backed currencies like the Australian dollar are now soaring



– causing howls of protest from Aussie exporters…global investors arequitting the US currency because they're worried it's a sinking ship...

The dollar is also falling because that's what the White House wants."It's important America continues to have a strong currency," said US

Treasury Secretary Timothy Geithner last week. "We've made clear ourcommitment to a strong dollar," added Larry Summers.

These men insult our intelligence. The US government desperately wantsa weaker dollar – so boosting exports while lowering the value of America's massive foreign debt. The currency markets will keep bettingagainst the greenback as they know the Federal Reserve will do nothingto stop a weaker dollar coming true. "Benign currency neglect" is thecornerstone of Obama's recovery strategy.

The danger is, though, that "the rope slips" and steady decline turns intonosedive. If the dollar did tip into free fall, US inflation would soar andinterest rates would skyrocket – whatever the Fed now says.

The world's largest economy would then face "stagflation" – thenightmare combination of recession and high inflation. This danger isvery real, not least because the rest of the world is seriously concerned atAmerica's wildly expansionary fiscal and monetary policy. That's thefundamental reason the dollar is falling...the dollar is tumbling due toAmerica's ultra-low interest rates, monetary incontinence and fiscal

irresponsibility.This past week several oil producers lied about meetings to get rid of theUS dollar as a method of paying for oil and its use in international trade.We do believe the story was true and was deliberately planted to expeditethe demise of the dollar as the world’s reserve currency.

As a result gold should hit $2,500 to $3,000 by the end of next year. Silvershould revisit $50.00 as well. This is the modern version of Chinese watertorture. This is what fraud and monetization brings from creditors who

see no light at the end of the tunnel. Many pundits believe this processwill quickly manifest itself in a dollar collapse. We do not call 71.18 onthe USDX a collapse. It is just a revisit to a long time support zone as 80once was. It will take eight months to three years before the bottomtotally falls out of the dollar. There is no question of a collapse. Itdefinitely will come. Going on to 2018 is a ruse by Fisk. It was part of theplanned leak to calm the public, when in fact the collapse will come inone-third the time or less. This is again why the foreign reserves of nations’ have fallen from 64.5% to 62.8%. Who would want to hold

dollars when the US and UK refuse to send owners their gold? This isunheard of. The German’s are incensed and we are sure they areparticipating in the secret meeting to dump the dollar. As we said earlier



the transition trade currency will be the SDR and beyond that a G-20trade currency unit. If it has a gold backing it should be 15%. Mostnations in the G-20 either have no gold or very little, which means theywill have to buy gold in the open market. That needless to say will push

gold prices higher.All of the above with pressure, will drive the dollar lower along with thedollar carry trade whose beneficiaries are generally oil, othercommodities and gold. Later perhaps silver as well. Borrowing money at¼% is a no brainer and that is why markets are extra buoyant. There hasbeen considerable central bank gold buying, especially by China, whichis and has been backstopping the price. The physical market now belongsto them. This heavyweight buying should take gold to $1,250 and then to$1,650 in short order. Remember, we need $2,500 approximately to

reflect official inflation since 1980 and unofficial inflation would put goldat $6,700. Those who believe being in another currency will be a safehaven are mistaken. All currencies will fall versus gold in varyingdegrees. Why put money in losers when gold and silver are the only safegames available? This will be the greatest bull market in history. Thedollar will fall to somewhere between 40 and 55 on the USDX. When thatoccurs the final meeting will be held, meetings similar to the Smithsonianin the early 1970s and the Plaza Accords of 1985. All currencies will berevalued and devalued versus one another and debt between countrieswill be defaulted on by 2/3’s. We believe the Federal Reserve notedomestically will be devalued on a one for three bases - three old ones forone new one. This is why gold and silver are valuable. They willappreciate as all currencies fall in varying degrees. In all probability3200 to 4200 of all US banks, out of 8400, will collapse and the FDIC isbroke. It will take $700 billion just to cover 1% of insured deposits. If you are not in gold and silver related assets you are going to lose 60% to95% of your wealth.

All we can say about our President receiving the Nobel Peace Prize isthat he joins Henry Kissinger and Yassar Arafat, both Illuminists andboth notorious pedophiles.

Phoenix sheriff, Joe Arpaio, who has been incarcerating more than30,000 illegal aliens a year has been directed by our President and JanetNapolitano of Homeland Security, the ex-governor of Arizona, to onlypick up criminal illegal aliens and not other illegal aliens. Do not enforcethe law. This will apply to all policing agencies in the country. This isreally just an extension of an existing program instituted by the previous

administrations. Compliance has been purchased in law enforcementagencies via federal payoffs. Now the question is will Congress pursue the



President for acting arbitrarily and unconstitutionally? Sheriff Arpaiohas not intention of stopping. He won’t wimp out.

The Trans Texas Corridor is dead says the Texas Department of Transportation. That means the North American Union is in more

serious trouble.On the FHA Barry Frank says it is fine to make money-losing loans usingtaxpayer money in order to sustain the housing bubble.

As of June 1, 2009, official US debt was $52.8 trillion. This does notinclude $3 trillion off balance sheet financing of unfunded pension plansfor corporate and state governments, or unfunded liabilities, such asMedicare, Social Security and other mandated programs, which all toldaggregate $105 trillion.

As debt increases asset prices that were inflated by speculation continueto fall in value. Distress selling continues. Part of the result is thatpersonal consumption has fallen to 69.3% of GDP. In 2010 that figureshould drop below 69%.

Our government promises that federal spending will extricate us. Don’tcount on it.

Retail sales declined in September by the largest amount this year as carsales plummeted following the end of the government's popular Cash for

Clunkers program. But outside of autos, sales were better than expected.The Commerce Department said Wednesday that retail sales dropped 1.5percent last month. That's smaller than the 2.1 percent fall economistshad expected, but still the biggest setback since sales dropped 3.2 percentin December.

Car sales plunged 10.4 percent, but excluding autos, retail sales rose 0.5percent. That's better than the 0.2 percent increase analysts expected.

Consumer demand, which accounts for 70 percent of total economic

activity, is being watched closely by economists who worry that anyrecovery from the recession could stall due to the strong headwinds thathouseholds still face.

U.S. business inventories fell by a bigger-than-expected 1.5 percent inAugust, the largest fall since last December, according to a governmentreport on Wednesday that showed businesses were still slashing stocks of unsold goods to cope with weak demand.

The Commerce Department said inventories fell to $1.31 billion, thelowest since December 2005. Economists polled by Reuters had expecteda 0.9 percent decline, after a 1.1 percent fall in July that was initiallyreported as a 1 percent drop.



Compared to August last year, business inventories were down 13.3percent, the department said.

Motor vehicles and parts inventories dropped 7.9 percent in August, thelargest decline since October 2001, after falling 2.3 percent in July.

Business sales rose 1.0 percent in August after increasing 0.3 percent theprevious month. Sales were down 15.1 percent from August last year.

The rise in sales left the inventory-to-sales-ratio, which measures howlong it would take to clear shelves at the current sales pace, at 1.33months' worth from 1.36 in July. It was the lowest ratio since Septemberlast year.

U.S. states suffer "unbelievable" revenue shortages. The U.S. economymay be creeping toward recovery after the worst slowdown since the

Great Depression, but many states see no end in sight to their diving taxrevenues. Tax revenues…trail even the most pessimistic expectations,despite the cash from the economic stimulus plan pouring into statecoffers.

"It's crazy. It's really just unbelievable," said Scott Pattison, executivedirector of the National Association of State Budget Officers, and calledthe states' revenue situations "close to unprecedented."

How can economists forecast Q3 GDP of 3.2+% when state income tax

receipts are down substantially? Of course the US bean-counters’ magicpencils! GDP, like CPI, has become are arbitrary metric.

Revenue in the three months ended Sept. 30 was 5.3 percent less thanassumed in the $85 billion annual budget, state controller John Chiangreported yesterday. Income tax receipts led the gap, as unemploymentreached 12.2 percent in August.

New York sales-tax collections for counties and the state dropped 8.3percent in the third quarter, a troubling sign for governments alreadystruggling with higher costs and declining revenue.

Texas, the second-largest state by population, said sales tax revenuetumbled 12.5 percent in September from a year earlier on weakness inthe oil and gas, retail sales and construction industries.

Georgia tax collections dropped by about 16 percent in September overthe same month last year, continuing a trend set in the first two monthsof the fiscal year, Gov. Sonny Perdue announced Thursday.

October surprise from bank earnings? Some experts worry results maybe much more negative than investors expect "Third-quarter earningsfor most banks, particularly the regional lenders, will be extraordinarilynegative," Bove said.



He estimates that about 60% of banks will report losses in the period asnonperforming assets continue to grow and charge-offs remain veryhigh. Lenders will also have to increase reserves because they didn'tbolster them enough during the second quarter, Bove added.

Loan growth will likely remain sluggish and net interest margins won'tincrease much, partly because funding costs have already dropped somuch that they can't fall much further, the analyst explained.

"None of this bodes well for the third quarter," Bove said. "Once themarket is faced with the reality of how bad the earnings are, it will beinteresting to see whether investors will be able to hold on to these stocksat these price levels."

With respect to bank earnings this quarter, they are priced for no new

skeletons in the closet, so NPA levels will remain a top focus. Anythingthat casts doubt on normalized earnings right around the corner couldhave a bad effect. You never know what spin will come out of the banks,press and analysts but rising NPA’s may very well trump the increasedgoodwill and likely write-ups in securities certain banks will have to relyupon in order to make the number.

The bottom line is that Serious Delinquencies and prime Defaults havekicked back in gear … this has caused the overall in-process foreclosurepipeline to continue swelling to record levels. Lastly, the 30-day late back

toCurrent bucket is dropping, as fewer delinquencies cure.

The Federal Reserve's program to revive the markets for U.S. securitizeddebt may be disrupted and credit to consumers choked off if plannedaccounting changes are implemented in 2010.

New rules by the Financial Accounting Standard Board, in the form of FAS 166 and 167, will force banks to put securitized debt back onbalance sheets and retain continued exposure to the risks related to

transferred financial assets, by eliminating the concept of a "qualifyingspecial-purpose entity."

The amount of capital available for making new loans to consumers forcredit cards and mortgages may be restricted as a result. [This will hitbank and corporate balance sheets and the stock market like athunderbolt.]

Still, people inside and outside the bank say they were stunned whenRichard D. Parsons, Citigroup’s chairman, enlisted the services last

spring of Richard F. Hohlt, a longtime Washington insider…



Critics say that as a top lobbyist for the savings and loan industry in the1980s, Mr. Hohlt blocked regulation of these institutions and played apivotal role helping to prolong dubious industry practices that costtaxpayers $150 billion to clean up.

After that crisis passed, he faded from the public eye but continuedadvising clients, cementing his contacts in the news media and evensurfacing as one among a handful of Washington insiders involved in thepublic outing of Valerie Wilson as a C.I.A. agent.

Five former regulators who encountered Mr. Hohlt during the savingsand loan fiasco expressed dismay and surprise that he had been hired bythe chairman of a bank that has received tens of billions of dollars of taxpayer assistance, and voiced concerns about what exactly he had been

hired to do.“It is singularly obscene that any recipient of taxpayer assistance throughthe TARP program during the current financial crisis would hire one of the most infamous lobbyists in the world to represent them,” says Mr.Black, who now is a professor of law at the University of Missouri atKansas City.

The Atlanta Fed research that noted 45% of job losses in this downturnare in small businesses further discredits the absurd, fraudulent BLSBusiness Birth/Death Model. We’ve noted for a year that US solons are

bailing out the few, the connected while the US middle and merchantclass gets eviscerated. The US middle and merchant class differentiatesthe US from Europe.

President Obama announced in March that he would be sending 21,000additional troops to Afghanistan. But in an unannounced move, theWhite House has also authorized -- and the Pentagon is deploying -- atleast 13,000 troops beyond that number, according to defense officials.

The additional troops are primarily support forces, including engineers,

medical personnel, intelligence experts and military police. Theirdeployment has received little mention by officials at the Pentagon andthe White House, who have spoken more publicly about the combattroops who have been sent to Afghanistan. [This is what you get from aNobel Peace Prize Winner.]

National chain store sales rose 1.9% in the first week of October versusthe previous month, according to Redbook Research's latest indicator of U.S. national retail sales released Tuesday.

The rise in the index was compared to a targeted 1.5% gain. The JohnsonRedbook Index also showed seasonally adjusted sales for the period wereup 0.6% from a year ago, and compared to a targeted 0.3% increase. The



year-to-year increase comes despite Wal-Mart Stores Inc. (WMT) beingin the prior-year figures but not this year. Since stopping its monthlysales reports in the spring, year-to-year declines have been notable.

Falling temperatures triggered seasonal demand for apparel inventory

and some retailers claim that the process has begun as sales picked upinto the Columbus Day weekend, said Redbook. It added seasonalapparel and Halloween items were among the biggest sellers.

The International Council of Shopping Centers and Goldman SachsRetail Chain Store Sales Index rose 0.6% in the week ended Saturdayfrom its level a week before on a seasonally adjusted, comparable-storebasis.

Colder-than-normal weather helped somewhat, particularly at

department stores, which have long been ailing.On a year-on-year basis, retailers saw sales rise 1% in the latest week even as traffic levels were lower.

Utah's struggling economy and the accompanying high unemploymentrate is exacting a bitter financial toll on the lives of thousands of thestate's residents.

The U.S. Bankruptcy Court for Utah has reported it received 10,706bankruptcy petitions during the first nine months of 2009. That's a

staggering 62 percent increase from the same nine month period a yearago. Utah isn't alone.

Bankruptcy filings nationally surged past the 1 million mark during thefirst nine months of 2009. It was the first time that seven-figure numberhas been hit in any nine-month period since the overhaul of the nation'sbankruptcy laws in October 2005, according to the AmericanBankruptcy Institute, a nonprofit research organization that studiesissues related to insolvencies.

Bankruptcy filings continue to climb [nationally] as consumers look toshelter themselves from the effects of rising unemployment rates andhousing debt, said Samuel J. Gerdano, executive director of theAmerican Bankruptcy Institute.

People who need to renew their Illinois driver's licenses have about aweek left before the cost of doing so triples. The cost of renewing astandard Illinois driver's license jumps from $10 to $30 on Oct. 11.

Drivers have to renew their licenses every four years, and the $10 fee hasbeen the same since 1983.



But this year, lawmakers and Gov. Pat Quinn raised a number of taxesand fees in order to pay for a $30 billion program to build roads, schoolsand bridges.

The driver's license fee increase is among them. Some qualifying drivers

can renew online until Oct. 11 for the $10 price tag. Because of theweekend and Columbus Day, the new $30 cost will first be charged atdriver's license facilities on Oct. 13, said secretary of state spokesmanHenry Haupt.

Convicted Ponzi scheme operator Michael C. Regan, who was accused of stealing $8.9 million from investors, was sentenced to seven years inprison yesterday in federal court in Brooklyn, N.Y.

Regan, a Massachusetts-based hedge fund manager, defrauded about 50

investors, beginning in 2000, prosecutors said in court papers. His RiverStream Fund collapsed in April 2008. Regan, 66, the fund’s sole manager,turned himself in in May 2008 and pleaded guilty to one count of fraudthe following month. He began the fund in 1998 with money from friendsand acquaintances, according to the prosecution.

US District Judge Carol Amon described Regan as “someone who took money from the vulnerable who were less likely to look beyond thefacade,’’ noting that a widow and a number of young adults and elderlywere among his victims. She said statements from victims showed that

“financial crimes impact victims as much as physical crimes.’’While Regan agreed to pay restitution of the $8.9 million, he filed forbankruptcy protection after turning himself in. Regan took $2.5 millionfor his personal use, according to court papers.

The government said it is unlikely his victims will ever be compensated.

Regan could face additional criminal charges for failing to file taxreturns for 10 years. He also faces a civil suit filed by the Securities andExchange Commission. [This means Pat Kiley should get 40 years, if

convicted.]JPMorgan Chase & Co., the second- largest U.S. bank by assets, saidprofit in the third quarter soared almost sevenfold, beating analysts’estimates, as fixed- income revenue surged.

Earnings climbed to $3.59 billion, or 82 cents a share, from $527 million,or 9 cents, in the same period a year earlier at the height of the financialcrisis, the New York-based company said today in a statement. Twentyanalysts surveyed by Bloomberg estimated earnings of 51 cents a share.

Last year’s quarter included $640 million of losses tied to the takeover of Washington Mutual.



Chief Executive Officer Jamie Dimon, who repaid the firm’s $25 billionof government rescue funds in June, is capitalizing on his 2008acquisitions of Bear Stearns Cos. and WaMu’s banking business.Investment-banking revenue from fixed-income markets jumped to a

record $5 billion, compared with markdowns of $3.6 billion a yearearlier. [The rich get richer as our country wallows in depression.]

The IMF performed a ‘general SDR allocation’, which effectively is aglobal expansion of credit and is inflationary, ergo the surge incommodities and stocks the past several weeks.

The IMF: The Special Drawing Right (SDR) is an interest-bearinginternational reserve asset created by the IMF in 1969 to supplementother reserve assets of member countries… [create credit out of thin air]

An SDR allocation is a low cost way of adding to members' internationalreserves, allowing members to reduce their reliance on more expensivedomestic or external debt for building reserves.

The IMF SDR scheme accounts for the $110 (12.7%) surge in gold sinceAugust 28.

The NY Post’s Paul Tharp argues that the move to replace the dollar asthe reserve currency is accelerating. Over the last three months, banksput 63 percent of their new cash into euros and yen -- not the greenbacks-- a nearly complete reversal of the dollar's onetime dominance forreserves, according to Barclays Capital. The dollar's share of new cash inthe central banks was down to 37 percent -- compared with two-thirds adecade ago.

Currently, dollars account for about 62 percent of the currency reserveat central banks -- the lowest on record, said the International MonetaryFund. Bernanke could go down in economic history as the man whokilled the greenback on the operating table.

By the end of 2019, according to the administration's budget numbers,

our federal debt will reach $23.3 trillion—as compared to $11.9 trilliontoday. To put it in perspective: U.S. federal debt was equal to 61.4% of GDP in 1999; it grew to 70.2% of GDP in 2008 (under the Bushadministration); it will climb to an estimated 90.4% this year and touchthe 100% mark in 2011, after which the projected federal debt willcontinue to equal or exceed our nation's entire annual economic outputthrough 2019.

Valuable lessons can also be drawn from Japan's unsuccessful

experiment with quantitative easing in the aftermath of its ruptured1980s bubble economy. The Bank of Japan's desperate efforts to fightdeflation through a zero-interest rate policy aimed at bailing out zombie



companies, along with massive budget deficit spending, only contributedto a lost decade of stagnant growth. Japan's government debt- to-GDPratio escalated to more than 170% now from 65% in 1990.

Some of Treasury Secretary Timothy Geithner’s closest aides, none of

whom faced Senate confirmation, earned millions of dollars a yearworking for Goldman Sachs Group Inc., Citigroup Inc. and other WallStreet firms, according to financial disclosure forms. [It’s pitchfork andtorch time!]

As part of Geithner’s kitchen cabinet, Sperling and Sachs wield influencebehind the scenes at the Treasury Department, where they help overseethe $700 billion banking rescue and craft executive pay rules and therevamp of financial regulations.

One year after US taxpayers bailed out much of Wall Street,compensation goes to a record while US unemployment soars and USreal incomes continue on their death march. Revolucion!!!

Kitchen worker received AIG ‘retention bonus’ AIG’s “retentionbonuses” went to hundreds of employees in the insurer’s troubledfinancial products unit, including a kitchen assistant who received $7,700in March, a US government report will reveal on Wednesday.

News that support staff shared $168m-plus (£105m-plus) worth of retention awards could undermine AIG’s insistence the bonuses wereneeded to persuade key employees to stay on and unwind the derivativestrades that almost brought down the insurer last year.

One in five hedge fund managers misrepresents their fund or itsperformance to investors during formal due diligence investigations,research from New York University’s Stern School of Business suggests.Managers most commonly misrepresented the amount of money they hadentrusted to their funds, their performance and their regulatory andlegal histories, according to the research.

The Investor’s Business Daily & Tachometric Market Intelligence saidtheir IBP/TIPP Economic Index slipped to 48.7 in October from 52.5 inSeptember. The Index is now 0.6 points above the 12-month average of 48.1 and 4.3 points above its reading of 44.4 in December 2007. The 6-month outlook component was down 7.4% at 49.7.

Now that the dollar has closed below 76 a feeding frenzy will begin and itwon’t be long until before 74 is tested. When the music stops the centralbanks will get buried.

Washington is in an almost impossible position. The economy requires $2trillion in additional stimulus, but the mounting multi-trillion deficit is amajor long-term threat. More stimulus will also put further downward



pressure on the dollar. What is needed is deficit reduction, not expansion.The current package has done next to nothing and $200 billion is beingwhispered around the beltway. That is laughable. As we mentionedbefore we see no rise in rates for at least a year. No matter what is done

the dollar will continue to fall and gold and silver will rise in spite of government manipulation.

Bob Chapman is a frequent contributor to Global Research

COBRAF -562 Mila Posti di Lavoro Italiani, 184 Mila Posti di Lavoro

Stranieri

01:19 16/10/09

Dal Bollettino di Banca di italia uscito oggi risulta che gli gli italianiche hanno perso il posto di lavoro sono stati 562 mila nell'ultimoanno e gli stranieri invece che hanno perso il posto circa 50-60 mila.Simultaneamente l'occupazione degli stranieri in Italia èaumentata di 184 milaCioè ne sono arrivati in grado di lavorare circa 230 mila, 50 milahanno perso il posto e la loro occupazione totale è aumentata di184mila persone mentre quella degli italiani è calata di 562mila.Questi dati sono simili a quelli americani che ho visto, in sostanza

senza l'immigrazione l'impatto della crisi sull'occupazione degliitaliani sarebbe stato meno della metà-----------...Occupazione Resta alto l’allarme occupazione. Nel secondotrimestre dell’anno, secondo Palazzo Koch, "la perdita è risultatadi oltre mezzo milione di occupati rispetto a un anno prima,escludendo dal computo l’effetto delle iscrizioni all’anagrafe dilavoratori immigrati. È stata di circa 300mila unità la flessione deilavoratori comunemente definiti come precari, in maggioranza

giovani". Nel terzo trimestre, inoltre, "si è ancora intensificato ilricorso alla cassa integrazione guadagni: le ore complessivamenteautorizzate sono aumentate di circa il 30% rispetto al trimestreprecedente". Nel dettaglio, rispetto al secondo trimestre del 2008, ladiminuzione dell’occupazione è stata di 378mila unità (-1,6%),come risultato di una riduzione più forte del numero degli occupatidi nazionalità italiana (-562mila) e di un aumento dell’occupazionestraniera (184mila). Quest’ultimo dato, tuttavia, avverte viaNazionale, riflette "esclusivamente il recepimento nei dati

anagrafici della crescita della popolazione straniera residente(aumentata di 307mila unità) e potrebbe riguardare pertantolavoratori già in attività".

http://mercatoliberonews.blogspot.com/2009/10/cobraf_16.html

http://www.cobraf.com/forum/topic.php?topic_id=5541&reply_id=192895



http://www.ilgiornale.it/economia/bankitalia_e_allarme_su_lavoro_e_conti_pubblici/economia-lavoro-economia-crisi-pil-conti_pubblici-occupazione-bankitalia/15-10-2009/articolo-id=391130-page=1-comments=1













---------------------quindi dice Bankitalia-562 mila posti di lavoro di occupati di nazionalità italiana+ 184 mila occupati stranieri

+ 307 mila straniera residenti in Italia nell'anno, di cui però solouna parte lavora.... diciamo forse 220-240 mila ? (ci sono anchegenitori anziani e figli piccoli...)... allora avresti che circa 50 milastranieri hanno perso i posto di lavoro o sbaglio nei conti (+184mila occupati stranieri contro 230 mila nuovi stranieri attivi nelmercato del lavoro entrati nel 2008 = 230-180 = 50...)Da questi dati deduci che gli italiani che hanno perso il posto dilavor sono stati 562 mila nell'ultimo anno e gli stranieri invece chehanno perso il posto di lavoro solo 50 mila, quindi si licenziano più

italiani che stranieri in % e simultaneamente il totale deglistranieri occupati è aumentato di 180mola mentre quello degliitaliani calava di 560mila-----------------

La Bolla è Tornata anche per le Case in California (dove EraScoppiata 3 Anni Fa)

23:54 15/10/09

Bisogna dire che la politica di Bernanke e gli altri governi ha

funzionato per ora, ci sono ora video e articoli che raccontanodell'improvvisa febbre degli acquisti di case in California e Nevadale due aree dove il mercato era crollato di piùLeggi di gente che vuole andare a stare in nevada a Las Vegas escopre che le case non stanno sul mercato più di 24 ore, arrivagente che le compra con 40% cash immediatamente, case chericevono 30 offerte diverse, se non decidi in giornata la perdi,agenti immobiliari che rubano la chiave della casa per impedireagli altri agenti di entrarvi

questo è un agente immobiliare diventato famoso perchè ognisettimana mostra le case che vende e parla sempre in modo moltocrudo, quando i prezzi sono assurdi lo dice sempre, negli ultimivideo dice che la gente è tornata a pagare prezzi privi di senso e cisono anche cash buyersse non sai molto l'inglese guarda ad esempio al minuto 2.00 delvideo la casa che mostra di 1600 square feet (160 metri quadri) chevendono per 850mila dollari, assai deprimente (siamo in Californiadel nord) come nota l'onesto agente

(Nota Bene: in America ora i mutui li garantiscono quasi tutti leagenzie governative, Fannie Mae la FNMA quindi lo stato e sonotutti senza pagamento iniziale di nuovo...)




http://www.youtube.com/watch?v=p5BX1hEUVrg&feature=player_embedded









------------------ descrizione del mercato immobiliare a Las Vegaquesta settimana ------This market is crazy and many things are just not going to makeany sense.

- I can guarantee you 99.99% of the listings emailed to you will nolonger be available by the time you get here.- Properties are selling in the blink of an eye.- Properties are getting multiple offers within a few days of beingon the market, the most offers I’ve heard a house had recently was44 offers (I know, crazy).- This market is crazy and many things are just not going to makeany sense.- 40% of all transactions are cash purchases, which makes it harder

for the buyers who are financing to get their offers accepted.- We have 1/2 the inventory we had a year ago and 4 times as manybuyers as we did a year ago.- Chances are we will have to submit several offers to have thechance of getting 1 accepted.- This market is crazy and many things are just not going to makeany sense.- You will probably leave not knowing if you have a house or notbecause banks take 2 to 3 weeks to respond, because this market is

crazy… you know the rest.http://www.cobraf.com/forum/coolposts.html Continua a leggere.... Pubblicato da ZioBarbero a 11.37 0 commenti Link a questo post

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Bob Chapman Deepening Financial Crisis 15 10 09

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